U10&11: Permitted Exceptions and Marketable Title Flashcards
What is Marketable Title?
Every contract of sale implies an obligation to convey marketable title
To entitle a seller to specific performance he must be able to tender a marketable title.
MARKETABLE TITLE: title that is free from REASONABLE DOUBT [not all doubt]
What is title?
Title means full and independent ownership of property
i.e. a fee simple absolute gives one the right to occupy and use, give away in will, and Sell or refuse to sell their property.
Contract shapes marketability- what does it address?
Quality and Quantity of title
What is Quality of title?
Involves those defects and encumbrances which may affect the seller’s estate and render title unmarketable.
What is an encumbrance?
Things that interfere with the owner’s use and enjoyment of the property.
Something that effects title to the property itself
burdens, liens, mortgages, judgements, taxes, easements-
What is a defect?
it is a general term that describes some problem or discrepancy that CASTS A REASONABLE DOUBT ON THE TITLE.
it is an error in the title in the manner it is conveyed.
- conveyance to a corp prior to incorporation, errors in execution of a deed, errors in descriptions, fraud, lack of capacity of a party in the chain of title.
what else impairs marketability?
threats of litigation or substantial expense [potential demand for removal of encroachments]
unresolved conflicts btw two surveys
lack of legal means of access [marketability is impaired if property is landlocked]
Difference btw marketability and insurability of title
insurability: based on the insurance company [title insurance co. agrees to provide insurance against defects affecting ownership or value of property]
marketability: is decided by the courts- [clear from defects/encumbrances]
Do Zoning ordinances affect marketability?
No. marketability is not affected by zoning issues.
Marketability of title is about impairments on title to property- NOT about legal or public regulation of the use of the property.
Do covenants, restrictions, and/or reservations render title unmarketable?
yes.
even if the covenant and restriction are beneficial to the property and enhance its value
even if the covenants and restrictions are the same as zoning requirements
Do Landmarks impair marketability?
No. All contracts are subject to the police powers of the state.
if the property lies within areas designated as an historic district, a purchaser, unless his k specifically provides otherwise, will be required to take title subject the limitations imposed on it by landmark preservation law.
Do encroachments render title unmarketable?
Yes. Minor encroachments do as well.
Action used to get encroachments [and trespassers] off of our property?
Ejectment.
SOL for ejectment for minor encroachments?
Where the encroachment of a wall onto neighboring property is:
6 inches or less, and abuts a wall on a neighboring property
owner has 1 year for ejectment
What happens if no action for ejectment is brought within a year?
the owner gets an additional year to sue for damages- but that is a forced sale and title is passed to the encroacher
if nothing is brought in 2 years the encroacher has an easement for as long as the wall stands.
